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IN THIS ISSUE: 

Personal Money Planning's Newsletter
March 22, 2014
Gary Silverman, CFP 

Welcome to the first weekend of spring 2014! In this issue, I look at something the economists call the "current account deficit." As always, we've included links to the most recent Times Record News articles; and this time, we have information from the Eaton Vance folks to keep us up-to-date with market trends.
Have a great week!

Gary Silverman, CFP�

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Shrinking the "other" deficit

   

If you're looking for good news, take a look at what economists call the "current account deficit," which is a way of measuring the flow of goods and services into and out of the country.  As you can see from the accompanying chart, up until around 1980, Americans tended to sell more products and services to the rest of the world than they were purchasing.  Since then, dollars have been flowing out of the country at rates ranging from troubling to alarming--and in the runup to the recession, as the chart shows, Americans were buying so much more from the world than they were selling out to it that the difference amounted to more than 5% of the total U.S. economy.

 


But lately, the trend has turned more positive.  Last year, the deficit ran to just 2.3% of GDP, the lowest level since 1997, and it looks like the economy is starting to get back in balance with our global competitors.  Part of the story is a reduction in petroleum imports--a trend which economists expect to continue.  Also contributing is a small decrease in humanitarian aid flowing out of the U.S., from $34 billion down to $31.6 billion--which still represents more than a third of the $81.1 billion total. 

 

Perhaps the most interesting component is services; last year, American businesses and consultants sold $57.92 billion more in services to the outside world than were purchased by Americans.  This suggests that in an increasingly knowledge-based economy, our country is well-positioned, even against countries that live or die by export surpluses, like Japan and China.


 (Thanks to Bob Veres for the information.)
 
--Gary
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From the Times Record News
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In many investment advisory offices, the worry isn't about the economy and the like; it's about the investment normally used to eliminate worry: Bonds. Read More...

Your Career
Some financial planners are playing around with the idea that their clients' careers can be seen as a type of investment. If that's the case, are you a stock or a bond? Read More...



Money101
Money 101:
Monthly Market Monitor
 Each month, Eaton Vance produces this document to help
keep us up to date on the markets with economic and
bargraph-money.jpg
 asset class data via numerous charts and graphs. Enjoy! Click here...

Final Thoughts
The Vernal Equinox

On The Old Farmer's Almanac website, there's an explanation of what most of us understand as the first day of spring, the vernal equinox. Take a look, it's filled with pleasant information, pictures and a bit of folklore. What makes me laugh, however, are the comments from readers at the bottom of the page. People will argue about anything.

Happy Spring!
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